The Dollar Index rose 0.20% intraday to hit a fresh three-month high, while benchmark 10-year Treasury yields eased to 4.089%, down nearly 2 basis points from Monday’s close. Lower yields typically support non-yielding assets like gold, but dollar strength continues to cap upside momentum.
Fed Signals Mixed as December Cut Odds Fall Below 70%
Fed policy signals remain mixed. While the central bank cut rates for the second time this year last week, Chair Jerome Powell stressed another cut in 2025 was “not a foregone conclusion.”
Market pricing now shows a 65% chance of a December cut, down sharply from 94% just a week ago, according to CME FedWatch. Fed Governor Lisa Cook supported the latest cut, citing downside employment risks, while Vice Chair Michelle Bowman is set to speak later Tuesday in Madrid, with traders watching for clarity on the Fed’s rate path.
Data Delays Leave Gold Traders Focused on ADP and ISM Reports
In the absence of official U.S. economic data due to the ongoing government shutdown, traders are relying on third-party reports.
The ISM manufacturing index for October came in at 48.7, below expectations of 49.3, reinforcing concerns about the U.S. growth outlook.
Focus now turns to Wednesday’s ADP payrolls and ISM services data, which may offer more direction on Fed policy and gold’s next move.
